We’re winning red tape war, says Fallon

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Businesses are benefiting from a reduction in red-tape costs of almost £1bn, the Government will say this week.

According to an official “red tape scorecard” due to be published on Monday, a government pledge to “light a bonfire” on poorly conceived regulation has resulted in net savings to businesses of £836m since January.

Business minister Michael Fallon will promise further savings worth another £83m will be made by June 2013, through “substantial reforms” to environmental regulations and employment and consumer law.

The figures, which are “independently verified”, come just a week after the CBI published a report that found new rules are actually costing firms £178m a year.

Mr Fallon said he was “disappointed” with the CBI’s reading of the Government’s red-tape record at a time when it is “upping the pace” on its drive to cut red tape. He will this week send officials to the CBI to “talk through the numbers”.

The CBI this weekend said it sticks by its figures. The discrepancy is partly down to its exclusion of major pensions regulations from its calculations, including a switch in pension indexing from the Retail Prices Index measure of inflation to the Consumer Price Index, and because it included the costs of European red tape.

Only a few firms will make savings from the switch to CPI (Berlin: CEJ.BE - news) , so including it in a red-tape account “distorts the picture”, the CBI said.

But business groups, including the CBI, accept that tomorrow’s report, the Statement of New Regulation, will show the Government is making progress on its deregulatory promises.